Canfor Pulp Products (OTCMKTS:CFPUF – Get Free Report) and Mercer International (NASDAQ:MERC – Get Free Report) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, valuation, profitability, analyst recommendations, earnings and dividends.
Dividends
Canfor Pulp Products pays an annual dividend of $0.23 per share and has a dividend yield of 37.7%. Mercer International pays an annual dividend of $0.30 per share and has a dividend yield of 4.9%. Canfor Pulp Products pays out 19.2% of its earnings in the form of a dividend. Mercer International pays out -8.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Earnings and Valuation
This table compares Canfor Pulp Products and Mercer International’s gross revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Canfor Pulp Products | N/A | N/A | N/A | $1.17 | 0.51 |
Mercer International | $1.99 billion | 0.21 | -$242.06 million | ($3.43) | -1.80 |
Insider & Institutional Ownership
74.1% of Canfor Pulp Products shares are held by institutional investors. Comparatively, 85.8% of Mercer International shares are held by institutional investors. 4.2% of Mercer International shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Profitability
This table compares Canfor Pulp Products and Mercer International’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Canfor Pulp Products | N/A | N/A | N/A |
Mercer International | -11.27% | -26.21% | -6.47% |
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Canfor Pulp Products and Mercer International, as reported by MarketBeat.com.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Canfor Pulp Products | 0 | 1 | 0 | 0 | 2.00 |
Mercer International | 0 | 5 | 0 | 0 | 2.00 |
Mercer International has a consensus target price of $9.25, indicating a potential upside of 50.16%. Given Mercer International’s higher probable upside, analysts clearly believe Mercer International is more favorable than Canfor Pulp Products.
Summary
Canfor Pulp Products beats Mercer International on 6 of the 11 factors compared between the two stocks.
About Canfor Pulp Products
Canfor Pulp Products Inc., together with its subsidiaries, produces and supplies pulp and paper products in Canada, Europe, Asia, the United States, and internationally. It operates in two segments, Pulp and Paper. The company offers solid wood; bleached and unbleached softwood kraft pulps; and bleached, unbleached, and colored kraft papers. It also produces green energy. The company is headquartered in Vancouver, Canada. Canfor Pulp Products Inc. operates as a subsidiary of Canadian Forest Products Ltd.
About Mercer International
Mercer International Inc., together with its subsidiaries, manufactures and sells northern bleached softwood kraft (NBSK) and northern bleached hardwood kraft (NBHK) pulp worldwide. The company operates through two segments, Pulp and Solid Wood. It manufactures, sells, and distributes pulp, electricity, and chemicals through pulp mills. The company also manufactures, distributes, and sells lumber, cross-laminated timber, finger joint lumber, glue-laminated timber, wood pallets, electricity, biofuels, and wood residuals. In addition, it generates and sells green energy produced from biomass cogeneration power plant to third party. Further, it produces and sells NBSK pulp manufactured from softwood; green energy using carbon-neutral biofuels, such as black liquor and wood waste; tall oil from black liquor for use as a chemical additive and green energy source; bio extractives and biomaterials, including lignin, turpentine, cellulose filaments, and sandalwood oil; and biofuels; as well as provides transportation and logistics services. The company sells its pulp to pulp markets, integrated paper and paperboard manufacturers; and lumber products to distributors, construction firms, secondary manufacturers, retail yards, and home centers. Mercer International Inc. was founded in 1968 and is headquartered in Vancouver, Canada.
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